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Democratic Committee Leaders Release Report Detailing Abuse of Taxpayer Funds by Top Trump Administration Official Charged with Overseeing Federal Health Care Programs

Sep 10, 2020
Press Release
House Committees Release Hundreds of Documents in Conjunction with Report and Call on GAO to Investigate Potential Violations of Federal Spending Laws

After a 17-month investigation, House and Senate Committee leaders today released a staff report detailing extensive abuse of nearly $6 million in taxpayer funds by Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma, who retained private communications consultants with strong ties to Republican political circles in order to arrange media appearances, secure profile pieces, book private meetings and lunches, chauffeur the Administrator during out-of-town travel, and handle a communications strategy focused on boosting her public profile and personal brand beyond her role as CMS Administrator. The consultants charged rates of up to $380 an hour, far exceeding the salaries of federal employees, who were sidelined by the Administrator, her aides, and the consultants.

The report was prepared by the staffs of House Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ), House Oversight and Reform Chairwoman Carolyn B. Maloney (D-NY), Senate Finance Ranking Member Ron Wyden (D-OR), and Senate Health, Education, Labor, and Pensions (HELP) Ranking Member Patty Murray (D-WA). 

“Our investigation found that Administrator Verma misused funds appropriated by Congress and wasted taxpayer dollars intended to support critical federal health care programs,” Pallone, Maloney, Wyden, and Murray said. “Congress did not intend for taxpayer dollars to be spent on handpicked communications consultants used to promote Administrator Verma’s public profile and personal brand. Administrator Verma has shown reckless disregard for the public’s trust. We believe she should personally reimburse the taxpayers for these inappropriate expenditures.”

During the course of the investigation, the House Committees obtained tens of thousands of pages of documents from HHS and private parties, conducted interviews and briefings with employees and executives of two consulting firms used by CMS, and collected additional information from databases, court records, and press reports, among other sources. The report contains over one thousand pages of previously non-public documents.

The Committees’ investigation also reveals that using these consultants may have violated federal law limiting how government officials are authorized to use funds appropriated by Congress. In connection with the report, the Committees have requested a formal legal opinion from the Government Accountability Office as to whether CMS’ expenditures violated the law.

As the head of CMS, Administrator Verma oversees the country’s largest federal health care programs—including Medicare and Medicaid—and is responsible for a $1 trillion annual budget. Instead of using these funds to ensure that Americans have access to and are aware of opportunities to enroll in these programs, the Committees’ investigation revealed that Administrator Verma wasted millions of taxpayer dollars on the use of these consultants. For example:

  • Administrator Verma and her top aides used consultants to build a shadow operation within CMS, through which these highly-paid consultants exercised decision-making authority over CMS employees and led communications efforts on major CMS policy initiatives and rollouts.
  • Consultants performed tasks that benefitted Administrator Verma personally beyond her role as CMS Administrator, such as booking private meetings for Administrator Verma with media figures and other high-profile individuals or seeking opportunities for Administrator Verma to receive awards.
  • One consultant who focused on promoting Administrator Verma’s public profile and personal brand drafted multiple iterations of an “Executive Visibility Proposal,” which detailed how to “highlight and promote Seema Verma leadership and accomplishment” and included proposals such as “[i]dentify key women’s, leadership and general-interest magazines for potential interviews/profiles” of Administrator Verma, recommending, among other targets, Good Housekeeping, Garden and Gun, Glamour, “Mommy Blogs,” Oprah Magazine, WSJ Weekend Lifestyle, and Woman’s Day.
  • In addition to multiple CMS employees, Administrator Verma was often accompanied on official travel with multiple consultants who billed hourly rates up to $380.
  • On multiple occasions, consultants billed as much as $203 per hour to drive Administrator Verma to or from appearances or otherwise provide labor at events.
  • Consultants submitted reimbursements for significant expenses related to CMS travel and accommodations, including for hotel rooms that cost more than $500 per night, hundreds of dollars above the government per diem.

Approximately two dozen of the consultants retained through various contracts had strong ties to Republican political circles, including:

  • The former Executive Director of the Trump-Pence transition team.
  • A consultant who is recognized for specializing in setting up profiles of Republican women and has extensive experience working in Republican politics, including Republican National Conventions, the House Republican Conference, and various Republican administrations.
  • A former Chief Strategist to Michelle Bachmann’s presidential campaign and Director of Messaging for John McCain’s 2008 presidential campaign. The consultant was retained by CMS while he was awaiting sentencing after pleading guilty in federal court to a felony charge of making false statements to the Office of Congressional Ethics as part of an investigation into the misuse of taxpayer funds.
  • Several consultants with prior experience working for GOP presidential campaigns and Republican National Conventions, as well as numerous former staff to Republican political campaigns or elected officials.

The Committees’ report follows a July 2020 report by the HHS Office of Inspector General, which found that CMS’ use of these same consultants violated multiple provisions of federal acquisitions law.

To read the full report, click HERE.

Appendix A is available HERE.

Appendix B is available HERE.

Appendix C is available HERE